North American precious metals explorer Premium Exploration Inc. (TSX-V: PEM; OTCQX: PMMEF) pushes forward with another milestone in its drilling explorations as the company discovers high gold mineralization in the upper gold zone its Friday Gold Deposit project in Idaho County, Idaho. The announcement came on the heels after industry reports indicated gold prices are headed towards another record high after several days of decline.

According to the company's March news release, new assay results reveal that the company discovered high gold mineralization under a dacite dike drilled with widths of 19 to 6 meters. Gold occurrences were determined onsite, appearing in veins, and distributed over pyrite in the form of quartz monzonite and mica schist with sericite carbonate alteration.

Meanwhile, Premium's shares traded at 0.075 on Monday, based on Businessweek and Yahoo Finance snapshots. Total volume averaged at 2,500, while the average trading volume is 83,419. According to Premium's investment thesis, Premium's market capitalization amounts to 1.07M. Yet judging by the scale of its Friday project and gold price rebound, Premium's value may increase by many-folds this year.

The company forecasts total gold revenue of $101 million from over 84,900 gold ounces it recovered so far. Gold prices rose again after a pullback at the end of 2013.

Although gold demand has dramatically fallen by 15 percent to a four-year low in 2013, according to a Guardian report, gold prices have slowly recovered from $1,200 an ounce by the end of 2013 to above $1300. On the other hand, S&P 500's index has risen by 30 percent, while the FTSE 100 rose by 14 percent. Industry experts are confident gold prices will once again breach the $1400 mark.

Gold Forecasts

Gold traders and speculators are holding back on the yellow metal after U.S. Federal Reserve Chair Janet Yellen hinted on the direction of the precious metals.

Yellen implied that interest rates are about to soar, signaling the start of a bearish year ahead for gold. "It is an asset people want to hold when they're fearful about potential financial market catastrophe or economic troubles and tail risks,"

Yellen told Republican Senator Dean Heller at Yellen's confirmation hearing, according to Market Watch. "And where there is financial market turbulence, often we see gold prices rise as people flee into them."

When asked about what drives gold price fluctuations, Yellen responded that she doesn't think "anybody has a very good model of what makes gold prices go up or down."

Not to be ignored from the whole picture are gold consumers, who have generated over 21 percent in demand for gold jewellery and coins, according to The Guardian.

China, in particular, is now the biggest gold that reached its peak around Chinese New Year. Analysts believed that China helped propelled gold's prices this year.

Just as Yellen forecasted, industry players also believe Chinese investors are buying gold as a hedge against a possible "financial correction of the world's second largest economy," The Guardian reported.

India was overtaken by the Chinese in terms of consumer demand for gold, according to Gold Demand Trends data from The World Gold Council.

Indian consumers ended 2013 buying 974.8 tonnes of gole, despite the Indian government's stricter import controls over gold lending and coin sales to regulate sales. In total, the annual gold demand in 2013 was 3,756.1 tonnes amounting to US$170 billion.

What tapered off this impressive demand, however, were exchange-traded fund outflows and lower central bank buying, according to the same World Gold Council report. As a result, the demand closed at 15 percent below the demand volumes recorded in 2012.

Despite forecasts of a bearish market looming ahead, some analysts believe investors should be buying and holding on to gold in 2014.

Peter Krauth of Money Morning noted investors should watch out for a possible gold rally in 2014, naming high-grade ore mining and physical Asian buying as two of the top reasons.

Premium's Gold

What all these things meant for Premium Exploration Inc. is that investors can hedge against financial losses by buying low-priced shares from micro-cap gold companies that have a potentially high value which investors have yet to realize.

Premium has re-priced units at $0.20 for a minimum of 5,000,000 units, which investors can purchase through private placement. Units consist of one common share, and come with one-half of the common-share's purchase warrant.

Premium warrants come with a forced exercise clause and the company is bound to reduce exercise periods of no more than a month from the release of a written notice.

The company will execute this agreement if shares traded over $0.60 for 10 consecutive days. As a gold exploration company, Premium engages in extracting, exploring and developing precious metals deposits in North America.

The company is involved in exploring gold, silver, platinum, palladium and rhodium in the United States. The company has ongoing projects in North-Central Idaho, an area that covers 180 square kilometers of the Orogrande Shear Zone, and South-Central Montana that covers 1,473 hectares of the Stillwater Ignaeous complex.

Idaho's Commitment

The company's Idaho project has great revenue-generation potential, as the mining town of North Idaho encourages a healthy, pro-mining climate for explorers and investors.

The state also ranks 7th on Fraser Institute's Policy Index, a government-supported mining history, and streamlined permitting via Joint Review Process. The Idaho County site also encompasses a large land package and resource that include the Friday-Petsite Deposit, the Deadwood Zone and the Buffalo Gulch Deposit.

The potential gold district covers three deposits and over nine targets and 20 prospects. The targets cover high grade zones (Spotted Deer) and a zone with a multi-million ounce potential (Baner). As noted earlier, high grading would be one of the trends seen to propel gold prices this year; Premium Exploration Inc. seems to fit the bill for high grade gold investing.